Markets are anticipating a 25 basis point interest rate cut by the Federal Reserve on September 17, a decision that could contribute to short-term volatility in equities and risk assets such as bitcoin and gold. Despite rising inflation, the Fed's approach suggests a delicate balance between easing monetary policy while managing economic growth concerns. Recent data indicates a slight increase in consumer prices and a softening labor market, with job growth stagnating and unemployment remaining steady at 4.3%. Historical analysis shows that past rate cuts near S&P 500 all-time highs tend to produce long-term gains for risk assets, with an average increase of nearly 14% in the following year. However, the immediate market reaction can be unpredictable. While investors expect the Fed to announce the rate cut, any deviation may result in market disappointment. Regardless of short-term fluctuations, the continued easing of monetary policy may bolster traditional assets and cryptocurrencies in the longer term.

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